Hertz files for bankruptcy
Weeks-long stay at home orders have decimated business for car rental firms.
Rental giant Hertz became the latest victim of the downturn sparked by the Covid-19 pandemic, after filing for bankruptcy.
It is one of the biggest Covid-19 casualties so far.
It runs the Hertz, Dollar, Thrifty and Firefly brands and had a fleet of more than half a million vehicles.
The company posted a $58 million full-year net loss in 2019, but that has ballooned to a 2020 first quarter deficit of $356 million.
As of March 2020 Hertz had $18.8 billion in debt and only $1 billion in cash on the balance sheet.
The share price is down 82% so far this year.
"The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company’s revenue and future bookings," it said Friday in a statement.
"Uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated today’s action."
Hertz is praying bankruptcy protection will give it ‘a more robust financial structure.’
It has already said 12,000 workers across North America will lose their jobs, while another 4,000 have been furloughed.
It has a total workforce of about 38,000.
Hertz and rivals like Enterprise Holdings had already seen their market share dwindle even before Covid-19 due to ride sharing alternatives such as Uber and Lyft.
Airport rentals make up a huge chunk of revenues for Hertz and its rivals, but with air traffic down more than 90%, they are all suffering.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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